01937cam a22002417 4500001000600000003000500006005001700011008004100028100002000069245012700089260006600216490004100282500001400323520098100337530006101318538007201379538003601451700001701487710004201504830007601546856003701622856003601659w2238NBER20180319111614.0180319s1987 mau||||fs|||| 000 0 eng d1 aKahn, Shulamit.10aConstraints on the Choice of Work Hoursh[electronic resource]:bAgency vs. Specific-Capital /cShulamit Kahn, Kevin Lang. aCambridge, Mass.bNational Bureau of Economic Researchc1987.1 aNBER working paper seriesvno. w2238 aMay 1987.3 aMost models of implicit lifetime contracts imply that at any particular point in time, workers' wages and value of marginal product (VMP) will diverge. As a result, the contract will have to specify hours as well as wages, since firms will desire to prevent workers from working more when the wage is greater than VMP and from working less when the wage is less than VMP. this divergence, combined with the fact that in efficient contracts, the hours are set so that VMP equals the marginal value of leisure, implies that workers will face binding hours constraints. We show that the two major models of lifetime contracts, the agency model and the firm-specific capital model, make opposite predictions regarding the relation between work hours constraints and job tenure. We test these predictions. Our results indicate that neither model of efficient long-term contracts explains the observed pattern of hours constraints. Therefore, we briefly consider other explanations. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web.1 aLang, Kevin.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w2238.4 uhttp://www.nber.org/papers/w223841uhttp://dx.doi.org/10.3386/w2238